Wells Fargo Q3 Earnings Beat Estimates on Fee Income Growth, Stock Up

Core Insights - Wells Fargo & Company (WFC) reported third-quarter 2025 adjusted earnings per share of $1.73, exceeding the Zacks Consensus Estimate of $1.55, and up from $1.54 in the prior-year quarter [1][10] Financial Performance - Total revenues reached $21.44 billion, surpassing the Zacks Consensus Estimate of $21.19 billion, and increased by 5.2% year over year [3][10] - Net interest income (NII) was $11.95 billion, a 2.2% increase from the previous year, driven by fixed-rate asset repricing and higher loan balances [3][4] - Non-interest income grew by 9.3% year over year to $9.49 billion, benefiting from the absence of prior-year net losses and higher asset-based fees [4][10] - Non-interest expenses rose to $13.85 billion, a 5.9% increase year over year, primarily due to higher severance costs and technology expenses [5][10] - The efficiency ratio increased to 65%, indicating a decline in profitability compared to 64% in the prior year [6] Loan and Deposit Trends - As of September 30, 2025, total average loans were $928.7 billion, up 1.3% sequentially, while total average deposits were $1.34 trillion, showing a marginal increase [7] Credit Quality - The provision for credit losses was $681 million, down 36% from the prior-year quarter, with net loan charge-offs at 0.40% of average loans, down from 0.49% [8][10] - Non-performing assets decreased by 6.6% year over year to $7.83 billion [8] Capital Ratios - The Tier 1 common equity ratio was 11% under the Standardized Approach, down from 11.3% in the third quarter of 2024 [11] Profitability Ratios - Return on assets improved to 1.10%, up from 1.06% in the prior year, while return on equity increased to 12.8% from 11.7% [12] Share Repurchase - In the reported quarter, Wells Fargo repurchased 74.6 million shares, amounting to $6.1 billion of common stock [13] Future Outlook - The growth in fee income, along with improving loan and deposit balances, is expected to support the company's top line in the upcoming period, although rising expenses may impact profitability [14]